One thread that was teased out but not explored in depth as we focused on cities, is what autonomy will mean for short-haul business travel. What does a world look like where, instead of going to the airport two hours early, taking hour flight, and then a commute into a city center, one just gets in a vehicle and works — or sleeps — en route to the destination?

Sven Schuwirth, vice president of brand strategy for Audi, recently posited to Dezeen that business travelers will avoid taking domestic flights to meetings and will skip city center hotels. He sees this as being a medium-term development, about 20 years out, but one that will have significant implications for the hospitality industry.

User experience (UX) researcher Andrew Cave breaks down a hypothetical scenario: one of the busiest short-haul corridors in the world: The Melbourne to Sydney airline commute. On paper, it seems like a no brainer to get on the plane. But Cave breaks down the times associated with taking a flight, and suggests that by eliminating the steps and friction points of 1.) getting to the airport, 2.) waiting pre-flight, 3.) the flight time, 4.) arrival, and 5.) commute from airport the idea of getting into a vehicle at point A, and arriving directly at point B could be indeed more pleasurable. Also, the estimated drive time of eight hours is at current speed rules, which could very well change in the future.

One key factor here is the actual design. In the future, an autonomous vehicle that is geared toward work and relaxation won’t look anything like the hands-on cars we drive now. Rather, it may approximate something like a business or first class cabin on an airline. The ability to lie flat, tuck in and catch a good six hours of sleep. Also, media companies should surely be salivating. When people don’t have to focus on driving, this represents a tremendous amount of “found” time for music, movie and other consumption.

Also, if people do ditch that 5:30 am flight to Chicago and opt to sleep overnight on the road, what does the modern day city arrivals lounge look like, where people arrive, get their suit pressed, take a shower and have a breakfast before heading off into the day? Something not unlike what exists now when you arrive at Heathrow on the red-eye. Will these experiences be brought to us by a luxury car manufacturer? Another brand? It might be something completely different than a city center hotel, and maybe hospitality brands need to invent it from the ground up.

We have a few years to go before autonomous vehicles are at full capacity, but we’re getting close. At the same time, an unusual thing happened in parallel: the rise of transportation network companies like Uber and Lyft. It is rare to have two things happen at the same time, and so there is a big opportunity in technology to re-frame what the business commute looks like and ideally make it a bit more pleasurable. Maybe an Uber sleeper service isn’t so far off.

Uber will argue this week in Europe that it is a mobile platform for connecting things, not a car or taxi service. Skift

Skift Take: ... and Skift is not the largest travel news and marketing platform. It's a pixel delivery service.

— Jason Clampet

Uber will seek to convince Europe’s top court next week that it is a digital service, not a transport company, in a case that could determine whether app-based startups should be exempt from strict laws meant for regular companies.

The European Commission is trying to boost e-commerce, a sector where the EU lags behind Asia and the United States, to drive economic growth and create jobs.

The U.S. taxi app, which launched in Europe five years ago, has faced fierce opposition from regular taxi companies and some local authorities, who fear it creates unfair competition because it is not bound by strict local licensing and safety rules.

Supporters however say rigid regulatory obligations protect incumbents and hinder the entry of digital startups which offer looser work arrangements to workers in the 28-country European Union looking for more flexibility, albeit without basic rights.

Uber found itself in the dock after Barcelona’s main taxi operator alleged in 2014 that it was running an illegal taxi service. The case concerns its UberPOP service which the company halted after the lawsuit.

Uber says it is a digital platform that connects willing drivers with customers and not a transport service.

The Spanish judge subsequently sought guidance from the Luxembourg-based European Union Court of Justice.

A ruling characterizing Uber as a transport service could expose it to stricter rules on licensing, insurance and safety, with possible knock-on effects on other startups such as online home rental company Airbnb.

The case has drawn global interest. The Netherlands, where Uber has its European headquarters, Finland, Poland, Greece and the European Free Trade Association (EFTA) have submitted written observations that tend to support Uber.

Spain, France and Ireland in their submissions however say Uber is a transport service. A grand chamber of 15 judges will hear the arguments, with more than 200 participants signed up for the hearing.

The case is Case C-434/15 Asociación Profesional Elite Taxi.

]]>207836Uber will argue this week in Europe that it is a mobile platform for connecting things, not a car or taxi service. / Skift50 U.S. Airports Tack on $183 Million for Taxi Rides Homehttps://skift.com/2016/11/22/50-u-s-airports-tack-on-183-million-for-taxi-rides-home/
Tue, 22 Nov 2016 14:10:06 +0000https://skift.com/?p=207390

A taxi dispatcher hands a piece of paper to a driver as other taxis line up outside the arrivals area of a terminal at LaGuardia Airport in New York. Airports across the country add surcharges of up to $5 a ride, typically passed directly on to travelers, for trips originating at their curbs. Kathy Willens / Associated Press

Skift Take: Airlines get a lot of grief for all the fees they charge. This story shows that a sliver of that ire could be directed at airports.

— Hannah Sampson

Ever feel like the taxi ride from the airport costs more than the trip there?

It’s not your imagination.

Airports across the country add surcharges of up to $5 a ride — typically passed directly on to travelers — for trips originating at their curbs. There are similar charges for limousine, Uber and Lyft drivers as well as shuttle buses for hotels, car rental companies and off-airport parking lots.

Those fees quickly add up, costing travelers more than $183 million last year at the 50 largest airports in the U.S., according to Associated Press calculations based on data obtained through dozens of public records requests.

“What are we doing that causes the airport to spend more money?” said Kimberly Grubb of Fort Worth, Texas, who was recently awaiting a Lyft pickup at San Francisco International Airport.

“It wouldn’t be any different than if we knew people here who could come pick us up,” Grubb adds. “It leaves a bad taste in your mouth.”

San Francisco has one of the highest pickup fees in the nation: $5 for taxi rides that originate there and $3.85 for rides provided by transportation network companies such as Uber and Lyft. Asked why the airport needs to charge such fees, spokesman Doug Yakel replied that state and federal regulations allow them.

Airports across the country say the ground transportation fees are necessary so they can pay to maintain the many miles of roads on their properties. The fees also go, in some cases, to hire staff to direct traffic and to dispatch taxis. With the growth of app-based ride services like Uber and Lyft, airports have also constructed new waiting areas and parking lots.

Officials at most airports were reluctant to further explain why they charged the fees except that doing so helps keep airport costs down, which in turn makes it cheaper for airlines to serve the community.

At Washington’s Reagan National Airport, taxis have to pay $3 to access the pickup line, while other services like Uber have to pay $4. Spokesman Rob Yingling says the airport has very limited space and needs to create waiting areas for the cars as well as pay dispatchers and do road maintenance.

However, San Francisco, Washington and most other airports don’t charge private cars to use their roads to pick up family and friends. (There are exceptions — Dallas-Fort Worth International Airport charges at least $2 just to enter the airport grounds.)

And it’s not just taxi rides that cost money.

You may decide to park your own car at a private parking lot a few blocks away from Los Angeles International Airport. There is a still a charge — passed on through the lot operator — for the shuttle ride to the airport. In L.A., that ranges from $2.57 to $3.85 for each loop around the airport, depending on the size of the shuttle bus. Hartsfield-Jackson Atlanta International Airport charges off-airport parking lots $10 per parking space, per year, to operate their shuttles.

Those renting cars aren’t immune from the fees either.

For instance, Las Vegas’s McCarran International Airport charges rental car companies a shuttle fee of $1 for every car rented.

Overall, the highest combined fees per originating passenger were in Las Vegas, the two Washington D.C. airports and Dallas-Fort Worth. (The AP analysis excludes connecting passengers because they don’t have a need for ground transportation.)

Las Vegas’s airport collected $17.4 million last year in such fees, which came out to 84 cents per originating passenger, the highest of the 50 largest U.S. airports. That pales compared with the $11.60 per enplaned passenger the airport collected in landing fees. But the $2 per taxi pickup fee does add up when the ride from the airport to most hotels is just 10 to 15 minutes.

Washington Dulles International was the next most expensive at 80 cents followed by National at 79 cents and Dallas at 67 cents.

The operator of the three main New York City-area airports is the only large airport system not to charge a pickup fee for taxis, Ubers or limos. The Port Authority of New York and New Jersey does charge a fee for off-airport parking lot shuttles and an advertising charge for hotel shuttles, making its average ground transportation fee 9 cents a passenger, one of the lowest in the nation.

Chicago’s two airports are the lowest of the 50 largest in the U.S., both averaging about 2 cents per originating passenger.

Karen Pride, director of media relations for the Chicago Department of Aviation, refuses to answer questions about the city’s fees. But one possible reason for the lower fees is that many fliers avoid taxis. Both of Chicago’s airports are directly connected to the city’s subway system. According to data from the Chicago Transit Authority, more than 18,000 people a day use the train to catch their flight. That’s nearly one out of every five passengers, according to AP calculations, although the data also captures any airport employees who use the train.

In the age of $25 bag fees and additional charges to sit together with your loved ones, these extra few dollars might not seem like much. But many fliers are just sick of being charged for every little service, including getting a taxi home.

“For them to just tack on a charge like that is kind of adding insult to injury,” says Lee Joseph, a flier from Portland, Oregon. “It’s like kicking people while they’re down.”

__

Brandon Bailey in San Francisco contributed to this report.

__

Copyright (2016) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

This article was written by Scott Mayerowitz from The Associated Press and was legally licensed through the NewsCred publisher network.

]]>207390A taxi dispatcher hands a piece of paper to a driver as other taxis line up outside the arrivals area of a terminal at LaGuardia Airport in New York. Airports across the country add surcharges of up to $5 a ride, typically passed directly on to travelers, for trips originating at their curbs. Kathy Willens / Associated PressLyft Is Ditching the Pink Moustache for Light-up Beaconshttps://skift.com/2016/11/15/lyft-is-ditching-the-pink-moustache-for-light-up-beacons/
Wed, 16 Nov 2016 04:30:11 +0000https://skift.com/?p=206521

This photo provided by Lyft shows an illuminated Lyft beacon. The ride-hailing service Lyft is getting rid of its pink moustache logo and replacing it with the beacon. Lyft via AP

Skift Take: Lyft is still just a small competitor compared to Uber, but improvements to the user experience should help the company gain more customers. At some point, function becomes way more important than cute branding.

— Hannah Sampson

Ride-hailing service Lyft, the underdog rival to Uber, is getting rid of its iconic pink moustache logo and replacing it with something more useful — beacons.

The light-up beacons, which Lyft calls “amps,” will be on the dashboard of Lyft drivers’ cars beginning Jan. 1 in New York, Las Vegas, San Francisco and Los Angeles.

Beacons can communicate with people’s smartphones using Bluetooth technology. In retail stores, this means guiding you to a certain shoe display, for example.

With Lyft, it means having your driver’s beacon light up a specific color once he or she is near. You can have your phone light up in that same color, too, then hold it up so the driver can see you.

Lyft says this will make it easier and safer for drivers and riders to find each other. This can be especially helpful at night, or in crowded areas where multiple people might be hailing a ride.

San Francisco-based says it won’t use the beacons for ads, though the passenger-facing side might be devoted to sponsored campaigns, such as a beer company warning against drinking and driving.

Lyft’s first symbol was a giant, bright pink, fuzzy moustache attached to the front of drivers’ cars. But it soon became cumbersome (it could get quite dirty, for example), and maybe a little too whimsical for a company working to expand. Next came the “glowstache,” a compact, pink, glowing plastic moustache. The amp, while still bright pink, is a clean, oval shape.

Lyft held a retirement party for the ‘stache, said Melissa Waters, vice president of marketing. But the pink stays.

“It’s loud, proud, quirky, fun,” she said. In upcoming TV ads, Lyft paints itself as just that, in deep contrast to a menacing, slick ride-hailing company called “Ride Corp.”

Copyright (2016) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

This article was from The Associated Press and was legally licensed through the NewsCred publisher network.

JP Morgan Chase and Deutsche Bank have declined to sell Uber IPO shares to their wealthiest clients. A traffic jam in New York Cty's Times Square. b k / Flickr

Skift Take: Some big banks are being cautious about investing early in Uber, since the timing of its big IPO has yet to materialize and the ridesharing giant has been slow to release concrete details about its finances.

— Andrew Sheivachman

The potential fees and reputation boost that could come from working on Uber Technologies Inc.’s initial public offering are the stuff of bankers’ dreams.

Yet at least two investment banks passed on selling shares of Uber to their high-net worth clients — shares eventually sold by other banks in January — because the ride-share company wasn’t willing to provide financial details about its business, people with knowledge of the matter said.

JPMorgan Chase & Co. and Deutsche Bank AG both turned down the opportunity to offer their wealthiest clients the option to invest in Uber, said the people, who asked not to be identified because the information is private.

Bank of America Corp. and Morgan Stanley ended up selling the shares earlier this year through those firms’ private wealth divisions.

JPMorgan and Deutsche Bank were concerned they wouldn’t be able to fill demand for the offering given the lack of specifics, the people said. Deutsche Bank also took into consideration that share sales through banks’ private-wealth divisions are unusual, and it hadn’t done one before, one person said.

The last such offering of a big technology company was more than four years ago. In that case, Goldman Sachs Group Inc. sold private shares of Facebook Inc. to international clients before the company went public in 2012.

Long Game

With a company like Uber, the major banks play a long game of relationship building to be best positioned when the company does pick banks to go public. While the Uber share sale was run through the private wealth divisions, it may still help put the firms in the company’s good graces. With the timing of any Uber IPO unclear, banks’ willingness to forgo that business is notable.

Before that sale, it seemed like Uber CEO Travis Kalanick and his management team had most of the leverage. For example, the company told bankers if the firms do any business for its biggest U.S. competitor, Lyft Inc., they’d be less likely to be hired, according to people familiar with those discussions.

So far, Kalanick has managed to deflect questions about the timing of the IPO. As recently as last month, he likened Uber to an “early high schooler” being asked to the prom. It’s still a little too soon, he insisted.

That reflected some progress from what he’d said a year earlier: “We’re like eighth graders; we’re in junior high, and someone is telling us that we need to go to the prom.”

High Valuation

Uber hasn’t had any trouble raising money since its founding in 2009, because investors typically want in on a highly valued startup before it goes public and the banks want a shot at a role when it does.

The San Francisco-based company has garnered more than $16 billion in cash and debt since it started more than six years ago, most recently at a valuation of $69 billion. If it were to go public at that level, it would have a higher valuation than almost 90 percent of the companies in the S&P 500 Index.

JPMorgan and Deutsche Bank passed on the opportunity to do business with Uber just as investor sentiment started to change for market-bound technology companies. There was a backlog of closely held Internet companies, with more than 144 valued at more than $1 billion, research firm CB Insights said in a report.

Path to Profitability

Colin Stewart, a managing director at Morgan Stanley who oversees tech financing at the bank, said at the time that private placements would no longer be the place to find “very strong valuations with a plethora of investors hanging around the hoop.”

Underwhelming post-IPO performance by some technology companies, including payments company Square Inc., didn’t help. Investors wanted to see a clear path to profitability.

The 290-page prospectus Morgan Stanley sent to prospective investors before the January sale didn’t include Uber’s net income or annual revenue. The document did include 21 pages of risks, namely competition, regulatory hurdles and no assurance that the clients would see any return on their investment.

The New York-based bank addressed the lack of data in its prospectus, saying “the development of insights and big ideas is valuable to the investment process, whereas obsession over incremental ‘information’ flow is not.”

Uber initially asked Deutsche Bank to be on the offering because it wanted to sell the stock to international investors, one of the people said.

Demand for the offering was higher from international clients than domestic, according to two people familiar with the matter. There was demand for more shares than were offered, another person said.

Despite passing up on a role in the private offering, JPMorgan advised Saudi Arabia’s sovereign wealth fund on its $3.5 billion investment in Uber that was announced in June.

A spokesman for Uber declined to comment. Representatives of JPMorgan, Deutsche Bank and Morgan Stanley declined to comment, while a representative for Bank of America didn’t respond to a request for comment.

Skift Take: Car rental brands are losing customers to ascendant ridesharing services. As they become more nimble and technology-focused, however, car rental companies should be able to regain some share in the ground transportation marketplace.

— Andrew Sheivachman

Car rentals have fallen out of favor with many travelers since new ground transportation options have emerged in recent years.

Competition aside, a variety of issues central to the business model of the car rental industry are making it more difficult for companies to maintain stable corporate growth.

Hertz Global Holdings took a major financial hit on Tuesday when its stock plummeted more than 50 percent after a disappointing earnings release revealed that its earnings dropped by $101 million year-over-year in the third quarter. The stock has since bounced back, but weak fundamentals aren’t getting much better for car rental companies.

“I want to acknowledge and take personal responsibility to the fact that I underestimated the depth and the breadth and the complexity of the transformation we are now undertaking at this company,” said Hertz Global Holdings CEO John Tague on the company’s third quarter earnings call. “… We’ve had macro factors that affected us and actually company-specific factors that affected us international, the terrorist events in March and subsequently in early July clearly had an impact on international inbound in Europe.

“I think in terms of the three- to five-year timeline, one of the caveats we mentioned all along, was it didn’t account for the possibility of a down cycle within one of the three years. So, I think that obviously affects our view around timing, and we don’t really know what the answer is. I think having a year like this arguably puts you further behind than where you’d like to be.”

Hertz has struggled to updated its technology backend, which has slowed the company’s pivot to a more mobile-focused strategy. While dabbling in the ridesharing space through a partnership with Lyft in select cities, Hertz has yet to figure out how to appeal to consumers who prefer an on-demand ground transportation experience.

Weaker Demand, Lower Car Values

Momentum, or lack thereof, has come to define the car rental space. Reduced demand in both the leisure and corporate spaces has led to rental car companies reducing their fleet size in order to cut overhead. Less demand, of course, means lower car rental fares for customers.

But the cars they do have, primarily small and mid-sized vehicles, are plummeting in value, meaning that selling off unused cars is having less of an impact on the bottom line than it used to.

Combined with seasonality and mounting pressure from competitors like Uber, these factors have forced car rental companies to adapt to a new competitive marketplace.

Similarities at Avis Budget

“While our rental volumes were up year-over-year, demand was weaker than we had anticipated,” said Avis Budget Group CEO Larry D. De Shon on the company’s latest earnings call. “International inbound volumes in Europe softened significantly as the summer progressed. Industry fleet levels turned out to be loose relative to demand in August and September, and pricing was negatively impacted.

“Whether this was due to security concerns, Brexit, the Olympics, the economy or some combination of these items, it’s hard to tell. Our international pricing declined 2 percent in the quarter with particular weakness in those areas most reliant on International inbound such as France, which saw pricing decline by more than six percent in the quarter and Portugal where pricing was down 11 percent.”

Avis Budget Group posted stronger results in Q3 2016 than Hertz, and has experimented with expanding its Zipcar carshare brand internationally. Now that car rental competitors have drawn down their fleets, they’re hoping to be able to charge consumers more.

“I think we’re seeing across the industry is fleets in line with the demand that’s there,” said Avis Budget Group president and chief financial officer David Wyshner. “That more than anything else I think is the driver of what we had in the third quarter, in terms of a reasonably healthy environment for pricing, despite demand that was a little bit softer than we had anticipated. And I think that is the principal driver of what we’re seeing in the marketplace and certainly positively impacted our ability to get positive pricing in the quarter.”

A customer checks in at a Hertz car rental counter at Hartsfield–Jackson Atlanta International Airport, in Atlanta. Hertz's earnings resulted in a tumbling of its value today. David Goldman / Associated Press

Skift Take: We are not sure that Hertz can ever fix its issues, especially as on-demand services like Uber and Lyft give business travelers fewer reasons to hit the car rental desk at the airport.

— Jason Clampet

Hertz Global Holdings Inc. lost half its market value after the rental-car company reported a third-quarter profit that badly trailed analysts’ estimates and cut its annual earnings forecast, blaming a decline in revenue and a drop in the values of its cars.

Hertz shares fell as much as 52 percent, wiping out $1.5 billion in equity value, and its bonds were among the worst performers Tuesday. Quarterly adjusted profit of $1.58 a share was far below the average estimate of $2.73 in a Bloomberg survey, and Hertz said full-year earnings may be less than a fifth of what it projected in August.

The rental company, whose largest investor is billionaire Carl Icahn, failed to adequately price the cars in its fleet and depreciate them over time before selling them in used-car auctions. The issue, which is far more pronounced at Hertz than smaller rival Avis Budget Group Inc., is the latest challenge Chief Executive Officer John Tague, a former United Airlines executive, has faced since joining in late 2014 in the wake of Icahn’s involvement.

“If they had a problem with the value of their cars, that means their depreciation was not adequate,” said Maryann Keller, an independent consultant in Stamford, Connecticut, who once sat on the board of Dollar Thrifty Inc., which merged with Hertz in 2013. “Depreciation is the highest cost in the rental industry. You have to know how much you will be able to recover on these vehicles.”

No investor was hit harder than Icahn, who owns almost 16 percent of the shares, according to the latest filings. He had disclosed an 8.5 percent stake in August 2014, when the stock traded for more than $100 a share.

Hertz shares tumbled 40 percent, the most since its 2006 public offering, to $21.55 at 11:50 a.m. in New York after slipping as low as $18.54. The company’s $500 million of 6.25 percent bonds due in 2022 dropped 6.75 cents to 94.75 cents at 11:17 a.m. according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. It was their biggest drop since they were issued in 2013, Bloomberg data show. Shares of rival Avis fell about 9 percent after earlier dropping 18 percent.

There are more questions than answers with Hertz and it will be “extraordinarily difficult” for investors to have conviction in continued progress on turnaround story given “these latest disappointing and surprising developments,” Deutsche Bank analyst Chris Woronka said in a research report. He cut his rating to hold from buy.

Profit Warning

Hertz said there could be added costs as it continues to match up depreciation rates in its financial statements with the value of the cars in its fleet. The company reduced its full-year earnings outlook to a range of 51 cents to 88 cents a share, after saying in August that it expected $2.75 to $3.50.

The disappointing results contrast with the situation at Avis, which through Monday’s close had risen 7.5 percent this year while Hertz had dropped 37 percent. Avis beat estimates for sales and profit in quarterly earnings reported after the market close on Nov. 2, and its shares surged 13 percent the next day.

Avis is gradually closing a revenue gap with its larger rival, with sales rising 3.1 percent compared with the decline at Hertz. It also did a better job controlling costs in the period, with a 2 percent gain compared with the 5 percent increase at Hertz.

Depreciation Effects

Tague took over in 2014 after former CEO Mark Frissora stepped down in the wake of accounting problems at the company and shortly after Icahn showed up with a large stake. Tague was chosen over rental industry veteran Scott Thompson, who ran Dollar Thrifty before it was sold to Hertz.

Hertz said depreciation per unit per month increased 14 percent in the quarter, due to lower than expected resale values, primarily in compact and mid-sized vehicles. The company also said it had a higher percentage of non-program vehicles, which are called “risk cars” because the automakers don’t buy them back after a fixed period of time. That means Hertz has to sell the cars in the used market or at auctions and manage the risk of value.

The cost associated with depreciation in its U.S. business was $462 million in the quarter, some 16 percent higher than it was a year ago.

The value of compact and mid-sized cars have been under pressure as American buyers favor trucks and sport utility vehicles. In October alone, the wholesale prices of used compact cars fell 3.4 percent, according to Manheim, the nation’s largest used vehicle auction house. Auction pricing on risk cars of all kinds fell 3 percent in October from September and 2 percent from a year ago, according to Manheim data.

Hertz had other issues, too. Its U.S. rental car revenue fell 2 percent in the quarter. The company also had a utilization rate for its cars of 82 percent. Goldman Sachs analyst David Tamberrino had predicted 86 percent. Keller said 85 percent is a pretty healthy rate.

The company got weaker pricing on its U.S. rental business, where revenues decreased 2 percent year-over-year thanks to a 3 percent decline in rental rates per day. Rental volumes were also at the low end of expectations, Tague said.

An academic study alleges that Uber and Lyft drivers discriminate against minority customers. Pictured is part of a Lyft drivers' promotion for General Motors' rentals. Lyft

Skift Take: Uber and Lyft have done a ton to blunt taxi industry racism by serving minority neighborhoods but at the same time some Uber and Lyft drivers, like many taxi drivers, are guilty of racist practices when it comes to avoiding minority customers. Like Airbnb, Uber and Lyft need to do something fast to address the problem, which is endemic in the ground-transportation industry.

— Dennis Schaal

Drivers for Uber Technologies Inc. in Boston canceled rides for men with black-sounding names more than twice as often as for other men.

Black people in Seattle faced notably longer wait times for a car using Uber and Lyft Inc. than white customers. The findings come from a study published on Monday by researchers at the Massachusetts Institute of Technology, Stanford University and the University of Washington.

“In many ways, the sharing economy is making it up as they go along,” said Christopher Knittel, a professor at the MIT Sloan School of Management and an author of the study. “A lot of this is a learning process, and you can’t expect these companies to have everything perfect right out of the gate.”

A new generation of technology companies have begun to grapple with how they can minimize racial discrimination. Airbnb Inc. recently released an extensive report studying racial bias on the site and proposed some changes to its policies. The home-rental company committed to offering more training for its hosts and hiring a more diverse workforce. It sent e-mails to customers over the weekend saying they must agree not to discriminate in order to use the site starting next month. However, Airbnb has resisted advocates’ calls to remove photos of guests and hosts from its platform.

In the case of ride-hailing apps, researchers similarly believe that names and photos are an issue. Such information gives drivers the means to discriminate against prospective riders. Uber doesn’t show customer photos to drivers. Lyft does, but passengers aren’t required to provide a headshot. Both San Francisco-based companies give riders’ names to their drivers.

“We are extremely proud of the positive impact Lyft has on communities of color,” said Adrian Durbin, a spokesman for Lyft. “Because of Lyft, people in underserved areas—which taxis have historically neglected—are now able to access convenient, affordable rides. And we provide this service while maintaining an inclusive and welcoming community, and do not tolerate any form of discrimination.”

The study, conducted in Seattle and Boston, included almost 1,500 rides. Four black and four white research assistants—split evenly among men and women—ordered cars over six weeks in Seattle. All used their photos on the ride-sharing apps. A second test was held in Boston with riders “whose appearance allowed them to plausibly travel as a passenger of either race,” although they used either “African American sounding” or “white sounding” names, the researchers said. The study found that Uber drivers disproportionately canceled on riders with black-sounding names, even though the company penalizes drivers who cancel frequently.

“Ridesharing apps are changing a transportation status quo that has been unequal for generations, making it easier and more affordable for people to get around,” Rachel Holt, Uber’s head of North American operations, said in an e-mailed statement. “Discrimination has no place in society and no place on Uber. We believe Uber is helping reduce transportation inequities across the board, but studies like this one are helpful in thinking about how we can do even more.”

The research also observed discrimination in the taxi industry—a well-known, decades-old issue. The paper doesn’t compare the rate of discrimination between traditional drivers for taxis or ride-hailing apps.

Lyft and Uber’s issues were slightly different. While researchers found that wait times were noticeably longer for black men on both services in Seattle, Lyft drivers didn’t cancel on black riders disproportionately. But the researchers said that because Lyft shows riders’ names and faces upfront, its drivers could simply screen out black passengers. Uber doesn’t show names until after the driver accepts the fare. “In Lyft, you can discriminate without ever having to accept and hit cancel,” Knittel said.

The researchers proposed changes that Uber and Lyft could make to reduce discrimination, including not identifying passengers’ names, more severe repercussions for drivers who cancel after accepting a ride and periodic reviews of drivers’ behavior to look for racism. However, Knittel acknowledged in an interview that there are advantages to providing personal information, such as creating a friendlier and more efficient experience. “There’s a trade-off here,” he said. “There is a potential benefit from showing names and photos, and yeah, I think we would agree with that. These companies have to weigh those two effects.”

While conducting the study, researchers also observed that women were sometimes taken on significantly longer rides than men. “Other female riders reported ‘chatty’ drivers who drove extremely long routes, on some occasions, even driving through the same intersection multiple times. As a result, the additional travel that female riders are exposed to appears to be a combination of profiteering and flirting to a captive audience,” the researchers wrote. The paper floats a possible solution to that problem: upfront fares—something Uber has already begun to roll out.

The authors of the study, along with Knittel, were Don MacKenzie, an assistant professor at University of Washington; Yanbo Ge, a doctoral student at the same Seattle-based university; and Stephen Zoepf, executive director of the Center for Automotive Research at Stanford.

Uber lost a small yet significant case in London over whether its drivers are employees and whether or not it is a taxi service or a 'platform.' Pictured is a taxi stand at Parliament Square in central London. Sang Tan / Associated Press

Skift Take: A victory of common sense over the worst kind of Silicon Valley BS. Far too many companies want to say they are something they are not in order to avoid responsibility to both employees and customers.

— Jason Clampet

Uber Technologies Inc. lost a lawsuit over pay and vacation time for U.K. drivers at the car-sharing service in a ruling that could change how workers are treated in the country’s burgeoning gig economy.

Three London tribunal judges turned to “Hamlet” as they criticized Uber for “grimly” sticking to “faintly ridiculous” arguments that it is an application provider rather than a taxi service. The case, brought by two Uber cabbies, is the first against the company in Britain and could have ramifications for more than 40,000 people in the U.K.

“We cannot help be reminded of Queen Gertrude’s most celebrated line: The lady doth protest too much,” employment Judge Anthony Snelson said in the ruling in reference to one executive’s evidence. It’s “unreal to deny that Uber is in business as supplier of transportation services. Simple common sense argues to the contrary.”

The San Francisco-based company has faced complaints about working conditions around the globe. A $100 million-settlement in a U.S. lawsuit with 385,000 current and former drivers in California and Massachusetts was rejected by a federal judge.

Freedom, Flexibility

Uber said that while the London ruling only affects two people, it planned to file an appeal. The company said that its UberX drivers in the country received an average of 16 pounds ($19.50) an hour after Uber had taken its service fee — compared with the minimum wage of 7 pounds 20 pence for people over the age of 25.

“The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want,” Jo Bertram, regional general manager of Uber in the U.K., said in an e-mailed statement.

Winnings at London’s employment tribunals are capped at about 80,000 pounds unless claimants can prove they’ve been victims of discrimination or were mistreated for blowing the whistle on corporate misconduct.

“This judgment acknowledges the central contribution that Uber’s drivers have made to Uber’s success by confirming that its drivers are not self-employed but that they work for Uber as part of the company’s business,” Nigel Mackay, a lawyer at Leigh Day who represented the drivers, said in an e-mailed statement Friday.

The company was valued at $69 billion in its latest funding round in June, making it the world’s most valuable privately-held technology company. The ruling is bad for drivers and consumers, according to the Institute of Economic Affairs.

“It’s a mistake to think of Uber as an employer — it is simply a platform that allows drivers and customers to meet and trade,” Mark Littlewood, director general at the IEA, said in a statement.

“Uber is no different from the dozens of other sharing platforms, such as Airbnb and eBay,” he said. “It would be laughable to suppose that those who run their business through eBay should expect sick pay and holiday leave from the tech firm.”

The decision could have wide-ranging impact for the group of technology companies that connect freelance workers with customers. Among these companies are food delivery services like U.K.-based Deliveroo and Berlin-based Foodora, a brand that is run by Rocket Internet’s Delivery Hero.

‘Gig Economy’

“This decision will potentially open the floodgates for further claims, not just from Uber drivers but from thousands of others who work in the gig economy,” said Lee Rogers, an employment lawyer at Weightmans, who wasn’t involved in the suit. “This is unlikely to be the end of the story – given what is at stake not just for Uber but for the industry as a whole.”

Deliveroo declined to comment on Friday’s ruling when contacted for comment.

Uber has faced a wave of litigation around the world centering on the status of its drivers. In New York City earlier this week, the taxi drivers’ union and individual drivers sued Uber, claiming it engaged in “wage theft” by not paying minimum wage or overtime. Some of the same drivers and the taxi union had previously filed a different suit in U.S. federal court alleging Uber violates the U.S. Fair Labor Standards Act and New York labor law.

Uber has faced similar actions too in the U.S. states of Arizona, California, Florida. Maryland, Massachusetts and Ohio. In those cases, Uber has so far been largely successful in arguing that drivers must take their disputes with the company to private arbitration, which makes it more difficult for the drivers to pursue a class action lawsuit against the company.

Meanwhile, in Europe, Uber’s French subsidiary was fined 50,000 euros ($55,000) by a tribunal in Lille which ruled Uber engaged in deceptive marketing by presenting what was essentially a paid transport service as a peer-to-peer car-sharing marketplace. Uber’s low-cost UberPop service has also been banned in France and the Netherlands for using unlicensed drivers.

This article was written by Jeremy Hodges and Jeremy Kahn from Bloomberg and was legally licensed through the NewsCred publisher network.

]]>204175Uber lost a small yet significant case in London over whether its drivers are employees and whether or not it is a taxi service or a 'platform.' Pictured is a taxi stand at Parliament Square in central London.Sang Tan / Associated PressTraditional Car Services Won’t Disappear From Corporate Travel Anytime Soonhttps://skift.com/2016/10/20/traditional-car-services-wont-disappear-from-corporate-travel-anytime-soon/
Thu, 20 Oct 2016 10:30:45 +0000https://skift.com/?p=200941

Skift Take: While ridesharing has gained solid traction in corporate travel, the business model of traditional car services providing ground transportation to companies is still strong. What remains to be seen is whether car services will widely adopt more user-friendly interfaces for hailing cars on demand.

— Andrew Sheivachman

If all you did was read news reports and listen to the raves of fellow travelers, you would probably think that ridesharing services like Uber and Lyft are rapidly putting traditional car services out of business.

Car service use is on the rise in general, after losing ground to ridesharing services from 2012 to 2015, according to the report. Regardless, revenue and employees grew over the same time period when car services and taxi companies lost market share to ridesharing. It pegs the segment’s revenue at $19.6 billion with a $1.7 billion profit, showing how expensive it is to run a car service company.

“Over the next five years, industry performance will continue to depend on rising corporate profit and consumer spending on domestic travel,” states the report. “Ride-hailing apps will continue to represent the bulk of industry growth as they expand to new regions. However, IBISWorld expects greater legal and regulatory scrutiny of these transport networks over the next five years, as certain local governments attempt to curb their expansion. Over the five years to 2021, industry revenue is forecast to grow at an annualized rate of 3.8 percent to $23.6 billion.”

So how do you square up the emergence of Uber and Lyft at a time when car services have fallen out of the limelight, but appear to be growing steadily in terms of financials?

The primacy of car services in the corporate travel space could have something to do with it, and they’re not happy about the near-daily reports on ridesharing drivers being involved in crime and other mishaps.

One of the biggest groups of car service companies in the country will soon roll out on demand technology similar to Uber, in order to appeal to business travelers and others who are fans of the new model.

“People that matter in corporations are following the liability trail,” said Scott Solombrino, president of Dav El / Boston Coach and co-founder of the National Limousine Association. “The problem with Uber and Lyft is that they think private greed is more important than public safety… It’s going to be more expensive on demand; we’re going to do the same thing they’re doing in our own pricing structure, then we’ll see what happens in the corporate world.There’s nothing wrong with innovation. We can’t compete on a pricing model, because we’re restricted to pay people properly.”

No Regrets

When asked, Solombrino says he doesn’t regret not thinking up Uber’s on demand interface years ago. But he is certain that car sharing’s marketshare in the corporate space will begin to rise once again.

“I don’t know how it plays out, but I know they’re not going to go unchallenged much longer and they only have market share to lose,” said Solombrino. “The clients who use us today want to use us. I don’t worry about losing business to Uber, it already happened. Now, Uber drivers come to us to be professional chauffeurs. The battle we haven’t won is the battle of public opinion, where people think car services are stodgy and for really rich people.”

Ridesharing does have a formidable foothold in corporate travel. Certify’s newly released report on ridesharing shows that services like Uber and Lyft may now control more than half of the national corporate ground transportation market, a mammoth increase from eight percent in Q1 2014. Taxi expenditure is down 63 percent over the same period.

(Certify’s numbers don’t include traditional car services, due to the difficulty of categorizing the fragmented group of providers around the country.)

“People are already overwhelmingly choosing ridesharing in their personal life and we see this consumerization of people’s professional lives,” said David Baga, chief business officer of Lyft. “They’re favoring Lyft for the flexibility, the convenience and a better customer experience. Companies are hearing that loud and clear, and they’re trying to get out in front of it. We’re seeing a relative increase in the velocity in how quickly decisions are being made around corporate travel.”

“Just like the same way that they evaluated traditional ground transportation, they have a lot of questions about understanding who the drivers are, how they’re selected, what criteria we use to ensure we have the right people in the Lyft platform, and how insurance works,” said Baga. “There’s a lot of misconceptions around ridesharing and these questions open them up to seeing that in most cases you’re actually getting more consistent coverage around the company [using ridesharing] than sending employees out in taxis, making it a choose your own adventure.”

The next step for ridesharing services to become further embedded in corporate travel is baking access into corporate travel management apps on the API level.

“One thing that I’m excited about is we have a vision of transportation that is delivered as a service, so one of the critical underpinnings of that is our tech platform being developed to be really accessible for a variety of different use cases,” said Baga. “We are extending that API to be able to really deliver on that promise by allowing other third party apps to consume the Lyft API and create a service where travelers are already working.”